Thinking is moving along on the use of smartphones with Near Field Communications (NFC) for Location Based Marketing. How can NFC help to drive customers to your door and encourage them to buy something?

The first thing to say is that it’s not primarily about payment. Payment by mobile is rolling out at an excruciatingly slow pace – not because of any technology challenges, but because of the battle for control between Mobile Network Operators, Financial Institutions, and large disruptive players like Google and Apple. That’s a story for another blog.

Instead, let’s consider two traditional ways of attracting customers and increasing sales: outdoor advertising and coupons. There are problems with both that NFC can potentially solve.

With outdoor advertising, it’s hard to know how effective it is: you don’t know who’s seen it, you don’t know where they saw it, and you don’t know whether it encouraged customers to come to your retail outlet/restaurant/bar/night club/website.

Now imagine your ads contain an NFC tag (known as a “smart poster”). You place them in likely places: bus shelters, motorway service stations, shopping malls, railway stations, outdoor maps – anywhere where people are walking by, potentially interested in what you have to offer. The ad invites the customer to touch their phone to the tag; this will: give him/her information about you; give them the opportunity to come to you for your latest offers; invite them to register with you so you know who they are; and tell you which locations are most effective for advertising and when. The fact that they have touched your ad tells you they are already minded to visit you – the rest is up to you. You can try different tactics in different places, and you will quickly build up data on what works and what doesn’t.

The second traditional tool is coupons. These are usually paper or card currently; the most common examples are coffee houses offering a free cup of coffee after you’ve had, say, ten. Presumably these are felt to work, or these chains wouldn’t keep offering them. However, they too miss a lot of tricks: the cards say nothing about the person presenting them, there is no capture of data about preferences, and there is no follow up – you don’t know who to follow up with. In addition, the time to get data about redemption of the coupon scheme is lengthy and the process is manual.

Now imagine your coupons are awarded and redeemed from a customer’s NFC phone. The customer would need to download your voucher app, and give some basic information to register – email address, mobile number, and basic demographics. Then they can tap a poster to download a voucher. Alternatively, they could touch their phone (with your app open) to a terminal in your store/restaurant to increment a counter which will qualify for a free coffee or whatever. Ideally, you will have a terminal in your retail outlet which will do this automatically. But if not, this can be done (as an interim solution) by QR code or barcode.

The other thing that mobile NFC allows you to do is to deploy collaborative campaigns. I think one of the areas of greatest potential co-operation is between transport operators and restaurants. So a football supporter travelling to an away game can get information about where to eat by tapping a smart poster at the bus or rail station, or even on the train or bus. Why not? – NFC smart posters require no power or networking – they can be placed as near to people as you like. Alternatively, you could encourage people to travel to a shopping centre by public transport – tapping a tag on the bus could qualify them for an offer from a shop or restaurant, located where the customer is travelling to, not just an anonymous billboard with no feedback mechanism.

I’m pleased by what I see as the growing number of business working to offer the elements of this solution and to bring it all together. It’s not too early to begin!

Fenbrook Consulting advises businesses about the commercial opportunities and technical requirements of Near Field Communications